Reward responsibility, not risk

Marketplace Staff Apr 1, 2008

TEXT OF COMMENTARY

Doug Krizner: Congress is back from spring break this week. It’s time to tackle the problem with struggling homeowners caught up in the subprime meltdown. One proposal calls for the government to temporarily buy and service troubled mortgages. Another would force mortgage lenders to refinance bad loans. But commentator Todd Buchholz says not so fast.


Todd Buchholz: A “pox on both your houses.” That’s what you heard in Greek tragedies, when larger than life figures like Oedipus, Midas, and, oh, Aristotle Onasis went too far with scandalous behavior. That’s how most Americans feel about the so-called victims in the housing debacle and the mortgage brokers who shoved money into their pockets.

Every day, we read yet another story about some Mr. and Mrs. “I deserve four bedrooms and a Jacuzzi,” who foolishly signed papers not realizing the risks. Now, some will have to move out of houses they couldn’t afford in the first place. Many of them are the same people who made up an annual income, because they were too embarrassed to share the real number with the bank. Imagine: Folks who will go on Jerry Springer to wrestle their spouses to the floor are embarrassed about tax forms!

Remember, if a guy didn’t put any money down, he’s not leaving any of his own money on the table when he packs his bags and slams the door behind him.

But no one mentions the people who lost out during the housing bubble. The honest, responsible moms and dads who sat around the kitchen table and decided, “Sorry kids, I can’t afford to take that job offer” in San Diego, Scottsdale or some other sunny, bubblicious place. They couldn’t afford it because speculators and crazed buyers drove up home prices. Sure, they could have climbed out on the ledge, signed ludicrous loans, and gambled with their kids’ piggy banks and college savings.

So now the risk-lovers — who showed all the patience of a caffeinated toddler — will be packing up boxes. And the responsible adults will finally have their chance to buy their dream house.

As for the crooked brokers and financial bloodsuckers — ah, they’ll just go back to some other fly-by-night job. Maybe day trading. Oh, wait a minute, no no, that’s too 1990’s. How about collecting Webkinz — you know, those half-real, half-virtual stuffed animals? My kids tell me that’s the next bubble. I wonder: Can buy them on credit?

Krizner: Todd Buchholz is a writer and former White House economic adviser to the first President Bush. His latest book is “New Ideas From Dead CEOs.”

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